I spent a considerable amount of time last week trying to explain what I refer to as a “fat pitch” in the market. Every year, you get maybe a half dozen great opportunities to make way into a market. These fat pitches serve as great entry points that don;t generate much in terms of portfolio heat, and will usually start our cycle of risk over again. I spent the entire month of May talking this out day by day until our first fat pitch of the year was thrown. The bulk of our members took a swing, and have corrected their mistakes from earlier in the year, in a short space of time.
Here we are again. We faced the second big pitch of the year last week, and already starting round two of portfolio melt-up mode.
My single best piece of advice right now is to focus on managing your July positions. You get gains, take them. You get to breakeven on something and still like it? Roll out. At the same time, continue to trade around this task by taking advantage of the great entry points we discussed in “risk stocks” through longer dated (minimum August) positions.
On the day I picked up DDD calls and JRJC shares.
More later…
OA
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the DDD calls look very expensive.
DDD has earnings coming up at end of July I believe
Aug 55s don’t look bad here..
OA, I don’t have access to ToS charts until I get home tonight, but what do you think of DRYS here?
Great spot.
JRJC looks like a tasty burrito.
Maurer on SA thinks another short squeeze could be in the works for DDD. Remember July 1st?
OA – why does ANGI hate us?
holding the common….waiting ever so patiently!!
You should see the way she is treated around these halls. It’s no wonder…
Soooo, I sold those KNDI call options against my position…slightly early. Sold the $17 julys for $0.65. Who knew it would rip this much!
son of a !!!! worst day to have a fire drill at work. Was looking to take some position early morning but going to just sit now.
thoughts on MITL? Seems to have the “forgotten” look.
OA – What do you think about GTAT here? Or is it too soon?
i love it long term. I dunno where short term bottom is. Interested as well. Will ask OA about it during AH
Any knife catchers care to field this one?
still lovin’ how NOAH and BONA are acting on the daily chart. no action today, but if they keep moving up, the dips look great.
OA, what do you think FSLR move here,,, negative ?
Selling $AMZN near open last Friday wasn’t enough, so I sold my $PCLN near open and my biggest achivement was selling $TSLA 30 minutes before its breakout.
Yay…
I guess at least my devastating “losses” are all just from gains I didn’t get. I need to stop trying to be “smarter” than the market.
:\
I learned a while back that on theses plays, unless they breakdown in a meaningful way, you MUST hold.
I feel you, although managed to hold things much better this past week – you have to not listen to that ball in your gut and make rational decisions based on what you are seeing or else you will lose money – I have more opportunity cost lost from not letting winners run than from holding on too long.
I had a really tough time with this coming from a pure stock trader. Stops are sacrosanct to me. It’s the Gospel. With options, not so much. You paid for the time, and you have to balance using all that time you paid for and letting it fritter away with time decay.
In the end, it’s gotten a bit easier for me to ask a different question: “Is this the highest this stock is going to be before expiry?” Even then, time decay will take out an OTM call even if it does go higher.
Thanks, you all (Yoshi too) I completely agree I HAVE to get into a good mode of looking at the range and letting that help stop my irrational emotions. I also sold the $TSLA at .60 or so, while I kept like $FSLR 65 at .60, hahaha. I have a lot of reflecting to do tonight.
if you look back at TSLA, to analyze the trade, it was still in a range this morning and hadn’t broken the lows from July 8th around $215. It was down for 1 hour, still within the range, before it took off. So, 1 hour into the week, you gotta let it do its thing as long as its in the range, right? had it broken down below 215 then I agree it would be ok to have cut it. I don’t mean any of this in a bad way, just trying to help review the trade as we can always learn from it.
Thanks for that Yoshii.
I think this reflects what I have to constantly remind myself of; analyze the daily chart and look for precision entries and exits on the lower time frame (hourly for me).
Bot AUG WDAY 82.5s @ 3.33 and DDD 55s @ 5.11 into close
Both look good.
i’m about a dollar away from watching AAPL become my first 6 figure trade MISSED. I had oct 630’s i let go of ridiculously too soon.
I think we both got out before the June drop, but just didn’t reload at the end of the month. Its likely to reject $100 don’t you think?…with it being the 2012 high. Scary territory as its unknown whether it can blast through, churn, or get rejected.
yeah, that’s right. we got out for what we thought was a decent exit, but the pull back only lasted 2 days and day 3 was a shoot up so fast that there was no shot at a re-entry below the original sell price.
OA – What’s your target on KING?
“Don’t stop ’til you get enough.”
well said.
We’re going to turn these fat pitches into a Home Run Derby and jack them out of the park so frequently that the haters swear we’re juicing.
I have seen surveillance photos of Victor Conte in and out of the Option Addict Headquarters.
Check out the Aug. calls on FUEL. It’s got the right setup with lots of upside, but the options are relatively cheap for the beta.
I bot July 25’s last week and am sitting pretty – seeing where they go today and will likely roll to August
I just realized I have a lot of July paper. Where has this month gone?! Let’s close this month out on a great note.
I was just thinking, but I wonder if “they” (smart money) use double-reverse psychology when they decide whether to ramp or flush a market, or if such measures aren’t needed against complete lemmings (most traders), or whether they need only look at various statistical measures to determine how to proceed.
It certainly feels like a rigged game at times, but maybe that’s just a natural occurring phenomenon. Kind of a like a chicken/egg dilemma.
Is the market rigged because of what the smart money does, or does the smart money’s actions make the markets appear rigged?
By the way, this reminds me, but “The Smart Money” by Michael Konik is a fascinating read on the world of big sports betting. It’s basically about the author being a runner for Billy Walters back in the day. It has a lot of parallels to trading.
Anyways…
ONVO ?
I need PCLN to go apeshit to the upside today.
would be great if WB CYOU and FSLR did too.
I’d be happy with P, YELP and YOKU personally…
Sold FSLR.
Yellen a piece of shit for messing up everyone’s plans today
i’ll never get the sell vs. hold part right it seems. I either leave a ton of money on the table, or i watch winners reverse to losers. most frustrating part of the game for me.
I’m with you Matt. And Grandma Yellen needs to sit the fu*k down and stop blowing my account out.
Yep, I am on the verge of going all in so I can blow up my account and walk away and be happier. This foray into trading has been a pointless 2 year endeavor while I watched money I could have used elsewhere slowly escape.
You don’t have to get it right all the time. Letting them run always and getting it right 20% of the time is enough if you have great entries and a few monsters. But if you lack confidence in your exit timing and it gets to your head you may want to scale out in 1/4ths or 1/3rds or something until you are more comfortable again.
My account is <15% of what it was when I started a few years ago. I enjoy following the markets and don't even really care so much about losing the $, but I seem to be wrong in every move I make whether I don't atch a fallign knife, enter on a b/o, use a stop or let it run… it's real Rosencrantz and Guildenstern Are Dead probability shit.
I’ve been a good fade recently – y’all might want to get ready to fade my long stops getting hit – just sayin’
What a difference a day makes – sheesh. Why do 3% swings down hurt so much more than 3% swings up?
wondering the same thing..
and quite a change of sentiment from yesterday
On the plus side, after I sold all my crap that shot up yesterday, I did buy puts on NFLX, PCLN, and AMZN… got the NFLX 410s for a cool .10 a piece. 🙂
Understand the NFLX, not so sure on the PCLN and AMZN – why wouldn’t you focus on some of the crappier stocks if you are going to buy puts?
Because they are high in dollar amounts so every .1% I am right counts.
Oh, and all of those guys were squeezing shorts pretty good. If there are not many shorts left on them… could be good to short.
Fair enough – hope they are working out for you!
PCLN 1250’s here?
No – I would wait for the end of day or a turn in market sentiment (not likely today)
Definitely would not buy anything expiring this week unless you completely plan on losing the premium
just confirming thoughts – thanks mel
Buying opportunity, selling opportunity or just sit on my hands?
I think you can buy things near lows from last week, and cut them without much loss if it breaks below that low. So, GMCR not looking good…not that it was really something we were looking at this last week anyway. YELP flirting with that cutoff. KEYW down $.42 I think is a buy for August…easily cut if breaks below $12.
scratch that, earnings 7/30 on KEYW
Long one metric fuckton of FSLR
LOL Love that.
IWM making a large turnaround – making me feel better about the rest of the week.
Never mind – right back down..carry on and eat popcorn
you have to at least be mindful of the china names ignoring the broad action
BOT: MGM July 4 25.5’s, WUBA July 50’s, and ZNGA Aug 3.50’s on this dip. Small position sizes. RUT is acting heavy.
Sold INO for a 40 cent loss and looking to cover the last 1/2 of YELP and WDAY short on another push lower. This market is getting tough to trade.
Iplongo – I hear ya on the frustration part, but don’t bow out…just trade smaller. Bits n pieces here and there till you get back to where you need to be. If that means sniping wins or putting in stop losses/trailing stops, just do it. If you are quick to cap gains, then you gotta be quick to cap losses, too. So, whatever you do, hopefully you adjust to stay in the game and play when it gets easier.
Double bottom or further slide? Looks like banks profits aren’t being hailed as a good thing by the Congress
Thanks for the PXLW tip from yesterday and whoever recommended PLUG Aug 5’s was a freaking genius!
$SINA July 46.5 YOLO
followed .. 0.72$
sorry but what does YOLO mean?
You only live once for the current young’uns – Carpe Diem for children of the 90s. Geronimo! for kids from earlier
LOL Well said.
PCLN trying to push back into green here.
Want to see PCLN above 1230 and TSLA above 222 for the day
I am going to go with a “Flyism” and just say I hope they both “RIP TITS” to the upside.
Here she comes our way…
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